What do you think of the 8-10% chance priced into the options market that Nke stock would decrease further from its 12-year low of 35.6 to rest at a stock price of 15 dollars or less?
I think it would be a value stock if it reaches a 92+% drawdown from its all time high to reach a price of 12.82 with a market capitalization around 19-20 billion dollars. However, since this is already an extreme outlier event, it is predicated upon a further 45% decrease in net earnings over the next four years, attributed to several factors: (1) a reduction in sales in China due to increased regional and national competitors, (2) a decrease in earnings and profitability due to tariffs and other input costs to production, (3) a slowing and ineffective brand turnaround currently being rolled out, (4) North American consumer is stressed and will be cutting their apparel budgets, (5) historical stock pump-up from the years 2009-2021 was an abbreviation of quantitative-easing and irritational valuation for what is ultimately a shoe and fashion company.
What do you think? Is Nke a value play if it reaches a price of 12.82 with eps at 1.16 for a price to earnings of around 11?